Hit Kit Global Solutions Ltd. (HITKITGLOBAL) - Director Report

Company director report

Yours Company's Directors are pleased to present 29th Annual Report of theCompany along with Audited Accounts for the financial year ended March 31st2017.

Financial Performance

The salient features of the Company's financial performance for the year under revieware as follows:

Particulars

(Rs. In Lakhs)

31.03.2017

31.03.2016

Gross Revenue

33.34

72.24

Operating Profit before Interest

1.38

0.56

Depreciation and Amortization and Tax

Interest

0.24

0.02

Depreciation

0.11

0.11

Profit before tax (PBT)

1.13

0.43

Provision for Taxation

0.35

0.13

Profit after tax (PAT)

0.78

0.30

Profit brought forward

48.77

48.47

Profit available for appropriation

49.55

48.77

APPROPRIATIONS

General Reserves

NIL

NIL

Surplus carried to Balance Sheet

49.55

48.77

Performance of the Company

During the year under the review the Company has recorded gross revenue of Rs. 33.34lakhs as against Rs. 72.24 lakhs in the previous year. After offsetting the expenses thecompany made a Profit after tax of Rs.0.78 lakhs against Rs. 0.30 lakhs in the previousyear.

The Earning per Share (EPS) for the year was Rs. 0.00 as against Rs. 0.00 for previousyear.

Dividend

In order to conserve resources for future growth your Directors do not recommend anydividend for the year.

Transfer to Reserves

The Company proposes to transfer Rs. NIL (P.Y. NIL) to the General Reserve out of theamount available for appropriations and an amount of Rs.49.55 Lakhs (P.Y. 48.77 Lakhs) isproposed to be retained in the Profit and Loss Account.

Changes in Share Capital

During the year Company has not made any allotment of Equity or preference Shares.

Retail Business

During the year your Company focused mainly its agri-business value chain. In thisobjective your company has carried out marketing of vegetables to the vendors in the APMCmarket which the company has sourced directly from the wholesaler from the sabji mandi'sthrough out in India.

Your company provides its customers with good quality produce that has better shelflife and more consistent quality in keeping the best interest of the consumers. The visionof the company is to generate inclusive growth and prosperity for farmers vendorpartners small shopkeepers and consumers.

As a marketing strategy the Company has established the vegetable supply chain fromvegetable market to vegetable vendors in the forthcoming financial year.

Extract of Annual Return

The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the CompaniesAct 2013 and Rule 12 of the Companies (Management and Administration) Rules 2014 isattached as ANNEXURE-I to this Report.

Number of Meetings of the Board

The Board of Directors has met Six times during the financial year 2016-17. Detailedinformation is given in the Corporate Governance Report.

Directors' Responsibility Statement

Pursuant to Section 134(3)(C) of the Companies Act 2013 Directors confirm that -

a) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b) the directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the company at the end of the financial year end ofthe Profit of the company for that period;

c) the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

d) the directors had prepared the annual accounts on a going concern basis. e) thedirectors had laid down internal financial controls to be followed by the company andsuch internal financial controls are adequate and were operating effectively.

f) the directors had devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

Declaration by Independent Directors

The Independent directors have submitted the Declaration of independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in sub-section (6).

Particulars of Loans Guarantees or Investments

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 are given in the notes to the Financial Statements.

Related Party Transactions

There was no related party transactions (RPTs) entered into by the Company during thefinancial year which attracted the provisions of section 188 of Companies Act 2013.There being no material' related party transactions as defined under SEBI (LODR)Regulation 2015 there are no details to be disclosed in Form AOC-2 in that regard.

During the year 2016-17 pursuant to section 177 of the Companies Act 2013 and SEBI(LODR) Regulation 2015 all RPTs were placed before Audit Committee for its prior/omnibusapproval.

The policy on RPTs as approved by Board is uploaded on the Company's websitewww.hitkitglobal.com.

Material Changes and Commitments

There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this Report

As your company is not engaged in manufacturing activities the reporting requirementon these matters is not applicable and Foreign exchange earning & outgo during theyear is NIL.

Adequacy of Internal Financial Controls

Internal financial controls with reference to the financial statements were adequateand operating effectively

Corporate Social Responsibility:

The Company is not required to constitute a Corporate Social Responsibility Committeeas it does not fall within purview of Section 135(1) of the Companies Act 2013 and henceit is not required to formulate policy on corporate social responsibility.

Ratio of The Remuneration of Each Director To The Median Employee's Remuneration:

(i) The percentage increase in remuneration of each Director Chief Financial Officerand Company Secretary during the financial year 2016-17 ratio of the remuneration of eachDirector to the median remuneration of the employees of the Company for the financial year2016-17 and the comparison of remuneration of each Key Managerial Personnel (KMP) againstthe performance of the Company are as under:

Sr. No.

Name of Director / KMP and Designation

Remun eration of Directo r /KMP for Financi al Year 2016-17

% increase in remunerati on in the Financial Year 2016- 17

Ratio of Remunerat ion to each Director/ to median remunerati on of employees

Compariso n of the Remunerat ion of the KMP against the performan ce of the Company

1

Mr. Kamal Agrawal (Managing Director & Chief Executive Officer) *

Nil

Nil

Nil

2

Mr. Amit Khandelwal ( Non Executive Chairman)

Nil

Nil

Nil

3

Mr. Arvind Sharma (Non-Executive Independent Director)

Nil

Nil

Nil

Profit / (Loss) Before Tax

4

Mr. Pavan Kale (Non-Executive Independent Director)

Nil

Nil

Nil

increased by 162 % and Profit

5

Mrs. Kiran Nagpal (Non-Executive Director)

Nil

Nil

Nil

/ (Loss)

6

Mr. Rajesh Mavani (Chief Finance Officer)

162500

Nil

Nil

After Tax increased by 162% in Financial

7

Mr. Rajkumar Kumawat ** (Company Secretary & Compliance Officer)

148300

Nil

Nil

Year 2016- 17

*: Mr. Kamal Agrawal was appointed as Managing Director on 17.11.2017. **: Mr. RajkumarKumawat was appointed as CS & CO on 11.08.2016. ii) The median remuneration ofemployees of the Company during the financial year was Rs. 3.11 Lakhs.

iii) In the financial year there was an increase of NIL% in the median remuneration ofemployees;

iv) There were 6 permanent employees on the rolls of Company as on March 31 2017;

v) Relationship between average increase in remuneration and company performance:- TheProfit / (Loss) before Tax for the financial year ended March 31 2017 increased by 162%whereas the increase in median remuneration was NIL%. The average increase in medianremuneration was in line with the performance of the Company.

vi) Comparison of Remuneration of the Key Managerial Personnel(s) against theperformance of the Company:

The total remuneration of Key Managerial Personnel Rs. 2.83 Lakhs in 2015-16 to Rs.3.11 Lakhs in 2016-17 whereas the Profit before Tax increased by 162% to 1.13 Lakhs in2016-17 (Rs. 0.43 Lakhs in 2015-16).

vii) a) Variations in the market capitalization of the Company : The marketcapitalisation as on March 31 2017 was Rs. 118.40 Lakhs (Rs. 144.30 Lakhs as on March 312016).

b) Price Earnings ratio of the Company was (32) as at March 31 2017 and was (39) as atMarch 31 2016.

vii) Average percentage increased made in the salaries of employees other than themanagerial personnel in the last 3 Financial year i.e. 2016-17 was NIL% whereas Noincrease or decrease in the managerial remuneration for the same 3 financial year.

viii) The key parameters for the variable component of remuneration availed by thedirectors are considered by the Board of Directors based on the recommendations of theNomination and Remuneration Committee as per the Remuneration Policy for Directors KeyManagerial Personnel and other Employees.

ix) The ratio of the remuneration of the highest paid director to that of the employeeswho are not directors but receive remuneration in excess of the highest paid directorduring the year  Not Applicable; and

x) It is hereby confirmed that the remuneration paid is as per the Remuneration Policyfor Directors Key Managerial Personnel and other Employees.

None of the employee has received remuneration exceeding the limit as stated in rule5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

Risk Management Policy:

The Company has in place a mechanism to identify assess monitor and mitigate variousrisks to key business objectives. Major risks identified by the businesses and functionsare systematically addressed through mitigating actions on a continuing basis. These arediscussed at the meetings of the Audit Committee and the Board of Directors of theCompany.

The Company's internal control systems are commensurate with the nature of its businessand the size and complexity of its operations. These are routinely tested and certified byStatutory as well as Internal Auditors.

Annual Evaluation of Performance of Board:

Pursuant to the provisions of the Companies Act 2013 and SEBI (LODR) Regulations2015 the company has implemented a system of evaluating performance of the Board ofDirectors and of its Committees and individual Directors. The Board has carried out anevaluation of its performance after taking into consideration various performance relatedaspects of the Board's functioning composition of the Board and its Committees cultureexecution and performance of specific duties remuneration obligations and governance.The performance evaluation of the Board as a whole and Chairman and the Non-independentDirectors was also carried out by the Independent Directors at their meeting held on 31stMarch 2017.

Similarly the performance of various committees individual independent and Nonindependent Directors was evaluated by the entire Board of Directors (excluding theDirector being evaluated) on various parameters like engagement analysis decisionmaking communication and interest of Stakeholders.

The Board of Directors expressed its satisfaction with the performance of the Boardits committees and individual Directors.

Directors and Key Managerial Personnel

During the year under review following changes took place in the composition of theBoard of Directors of the Company.

Appointment / Change in Designation of Director

During the year under review Mr. Kamal Agrawal was appointed as a Managing Director ofthe Company w.e.f. 11th November 2016.

KEY MANAGERIAL PERSONNEL:

Appointment

During the year Mr. Rajkumar Kumawat appointed as Company Secretary and ComplianceOfficer of the Company w.e.f. 12th August 2016.

Resignation

During the year under review Mr. Pradeep Vyas Company Secretary and Compliance Officeresigned w.e.f 29th May 2016.

Significant and Material Orders Passed by Regulators or Courts or Tribunals:

There are no orders passed by the regulator or courts or tribunals against the Companyimpacting status as going concern on its operations

Presentation of Financial Results

The financial results of the Company for the year ended 31st March 2017 have beendisclosed as per Schedule III to the Companies Act 2013.

Corporate Governance Report

A Certificate from Statutory Auditors Regarding Compliance of the conditions ofCorporate Governance as per the requirement of SEBI (LODR) Regulations 2015 is annexed tothe report on Corporate Governance.

The Board of Directors support the concept of Corporate Governance and having regard totransparency accountability and rationale behind the decisions have made properdisclosures separately under the heading "Corporate Governance".

Auditors

Statutory Auditor

Pursuant to the provisions of section 139 142 of the Companies Act 2013 and theRules made thereunder the current auditors of the Company M/s. G.R. Modi & Co.Chartered Accountants (FRN: 112617W) were appointed by the members at the 28thAnnual General Meeting to hold office until the conclusion of the 33rd AnnualGeneral Meeting subject to ratification by members at each Annual General Meeting.

The members are requested to ratify the appointment of M/s. G.R. Modi & Co.Chartered Accountants (FRN No.112617W) as statutory auditors of the Company and to fixtheir remuneration for the year 2017-18.

There are no qualifications reservations or adverse remarks or disclaimers made byM/s. G.R. Modi & Co. Statutory Auditors in their report.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Companies Act 2013 and Rules madethereunder the Company has appointed M/s. Monika Thanvi & Associates (membershipnumber: 31494) Practicing Company Secretary to undertake the secretarial audit of theCompany. Secretarial Audit Report for the year 2016-17 given by Mrs. Monika Thanvi in theprescribed form MR-3 as ANNEXTURE-II to this Report. The Secretarial Audit Reportfor the year under review does not contain any qualification reservation or adverseremark or disclaimer made by the secretarial auditor.

Listing

The Securities of your Company are listed with the BSE Limited and Ahmadabad StockExchange limited and pursuant to Regulation 14 of the SEBI (LODR) Regulation 2015 and asper listing requirement of the Stock Exchanges the Annual Listing fees for the year2017-18 have been paid.

Public Deposits

The Company has not accepted any deposits from the public within the meaning of Section73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits) Rules2014.

Management's Discussion and Analysis Statement

The Management Discussion and Analysis for the year 2017-18 as required under SEBI(LODR) Regulations 2015 are given in separate section forming part of the Annual Report.

Audit Committee:

The Audit Committee of the Board pursuant to Section 177(2) of the Companies Act 2013and Rule 6 of the Companies (Meetings of Board and its Powers) Rules 2014 consist ofThree Directors and all are Independent Directors and constitutes majority.

Nomination and Remuneration Committee:

The Company's policy on directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of a director and recommendto the Board a policy relating to the remuneration for the directors key managerialpersonnel and other employees has been attached as ANNEXURE-III to this report.

Policies of the Company:

Your Company has posted the following documents on its website www.hitkitglobal.com.

4. Familiarisation Programme for the benefit of the Independent Directors 5. Nominationand Remuneration Policy 6. Policy for determining materiality of events 7. Policy fordetermining "material subsidiary" of the company

Adequacy of Internal Financial Controls

The details pertaining to adequacy of internal financial controls with reference to theFinancial Statements pursuant to Rule 8 (5) (viii) of the Companies (Accounts) Rules 2014are included in Management Discussion & Analysis which forms part of this report.

Acknowledgements

The Board of directors places on record its sincere appreciation for the dedicatedefforts put in by all employees their commitment and contribution at all levels in mostdifficult and challenging environment during the year. Your Directors would like to recordtheir sincere appreciation for the support and co-operation that your Company receivedfrom business associate and other strategic partners of the company.

Your Directors wish to place on record their sincere appreciation and thanks for thevaluable co-operation and support received from the Registrar of Companies MaharashtraRegional Director Western Region Ministry of Company Affairs Stakeholders Company'sbankers financial institutions Regulatory Authorities Stock Exchanges and shareholdersat large and look forward to the same in greater measure in the coming years.